Ugg drives first quarter sales at Deckers

Deckers Outdoor, the US owner of footwear brand Ugg, said that strong sales of the sheepskin boot brand helped first quarter sales to rise but that its second quarter performance would be impacted by the move to wholesale in the UK.

Total sales at the company rose 31.4% to $204.9m (£123.8m) during the quarter to March 31, as Ugg’s spring 11 collection was well received.

Deckers said some $50m (£32.1m) in sales would be shifted to the third quarter as it changed to operate a wholesale model in-house for Uggs in the UK. The group said that sales that normally would have shipped during the second quarter under the previous distributor business model will now ship on a higher wholesale basis in the third quarter of 2011.

Sales of Ugg rose 42.2% to $148.4m (£89.6m) in the first quarter due to “higher demand for the Ugg brand driven by new product introductions and enhanced marketing efforts combined with the launch of the Ugg brand’s United Kingdom website”, said the group.

International sales rose 45.8% to $56.7m (£34.2m).

Angel Martinez, president, chief executive and chair of the board of directors said: “We believe that our strategies to diversify our merchandise assortments and extend the global reach of our brands are being executed successfully. The favourable response to the UGG brand’s spring line of fashion sandals, sneakers, slippers and boots drove gains in our domestic wholesale, consumer direct, and international distribution channels.

He added: “The first quarter was also highlighted by the commencement of our conversion to wholesale operations in our largest international market, the United Kingdom, and expansion of our existing business in our second largest market, Benelux. For the most part, these transitions have gone smoothly, and in addition to the immediate financial benefits, we are optimistic about the long-term growth opportunities these conversions will create for our Company.”

Deckers added that it was raising its full-year outlook. Full-year revenue is expected to increase by about 21% over 2010, compared to previous guidance of approximately 20%.

Sales in the second quarter of 2011 are expected to increase by about 4%.

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